The day has arrived… Your child has achieved one more life milestone: attaining his/her driver’s license. Now that he/she is licensed and eager to hit the road, unfortunately, this means one of two things: purchasing another car or adding him/her to the existing car insurance policy. Car insurance policies are not made the same for everyone. For those who are younger and/or inexperienced, car insurance providers deem them as riskier than mature, seasoned drivers.
With COE prices on the rise, now might not be the best time to purchase another car. Hence, the only option is to re-look your existing car insurance and choose a policy that’s inclusive of young, inexperienced drivers.
We round up the car insurance plans specially designed for young or new drivers in this article.
What are ‘young and/or inexperienced drivers’?
Although the definition varies by insurer, a young and/or inexperienced driver is usually defined by insurers as someone under 30 years and/or has less than 2 years of experience driving.
To insurers, statistically, younger drivers pose a much greater risk on the road, because of their lack of driving experience as well as a higher likelihood to drive recklessly. That doesn't mean that all young drivers are prone to do this, of course.
Studies have shown that young car drivers are up to 10 times more likely to experience injuries as a result of road crashes as compared with the safest age group of drivers. Young males also have a higher crash rate than young females, according to statistics.
Excess applies for the young and/or inexperienced
Because car insurers assess young or inexperienced drivers to be more at risk, they charge higher premiums.
Young and inexperienced drivers are typically also subjected to a Young/Inexperienced Driver (YIDR) excess. This is a set sum added on top of the standard excess. The YIDR excess can range widely from as low as $500 to around $4,000 in certain cases. The excess clause safeguards insurance companies so they won’t have to fully cover damages caused by high-risk drivers.
Factors to consider when choosing the best car insurance for young drivers
Price aside (more on that later), there are a few other criteria to consider:
Accidents can happen, hence choosing a policy with a generous limit above $50,000 will ensure you're adequately covered. (Aviva Lite, Etiqa Comprehensive and FWD Prestige)
Personal liability protection
In case of damage to a third party’s property, this ensures you won't be out of pocket. (Aviva, AIG, FWD)
Roadside assistance and towing services
Aside from the peace of mind this brings, having these options means you won’t be the first one they call at 3 am for a flat battery. (Aviva, AXA and FWD)
Replacement car or transport allowance
Should your primary vehicle be out of action while the car is in the workshop, this option will come in handy. (Aviva Prestige, FWD Executive & Prestige, Etiqa Comprehensive)
Usually, a high additional excess is imposed on young and/or inexperienced drivers - sometimes as much as 1.5 times more vs. a driver in their 30s. Such drivers, or families who have cars that will be driven by younger drivers, should find a comprehensive car insurance policy that provides excess waiver, or lower excess for young and/or inexperienced drivers.
Best car insurance for young adults
The truth is that many young and/or inexperienced drivers do get into accidents, no matter how competent you may think you are.
The biggest issue with adding a young, inexperienced driver to your existing plan is they’re deemed risky and automatically charged higher policy premiums – sometimes as much as 1.5 times more vs. a driver in their 30s. Money aside, the premium hike can deter many young drivers from getting behind the wheel (while the skills are still fresh in their mind), and in the long run, could result in a higher rate of on-road incidents. Thankfully, some insurance companies have recognised this Catch-22 and countered with policies that are friendlier to drivers aged 24 and under.
Aviva car insurance
The Lite and Standard plan limit the additional excess for drivers under 24 years old, or with less than 2 years experience to $2,500. However, under the Prestige policy, the Additional Excess is reduced to $0, which is a major perk to consider alongside its eCall Assistance Service that automatically alerts an emergency team in real-time if an accident occurs.
FWD car insurance
For insurance holders already with FWD and holding its Lifetime NCD Guarantee at 50%, it’s recommended to stay with this policy. While the Additional Excess is limited to $2,500, it is applicable only for drivers under 27 years old, and not extended to drivers with less than 2 years of driving experience. Another big plus is under the Executive or Prestige plan, any authorised driver will be covered so long as FWD has been informed.
Etiqa car insurance
Choosing their comprehensive plans allows for the Additional Excess (applicable to elderly, young or inexperienced drivers) to be $2,000. Under this policy, another perk is excess for named drivers can be adjusted to fit one’s needs, while Additional Excess for unnamed drivers is $500.
Last but not least, make sure the driver is authorised!
Nothing is stopping a young driver with a valid driving licence from owning and driving his own set of wheels. But if it is a shared car, ensure that the young driver is either the insured policyholder, is a named driver under the policy, or is sufficiently covered by the car's insurance policy. Otherwise, any car damage or medical bills of victims must be paid out of pocket — the policyholder will not receive any form of compensation.
It goes without saying that no one without a licence should be taking your car for a spin, young or old. Otherwise, you would not receive compensation, and could end up on the wrong side of the law.
After all that's said and done, a young and inexperienced driver can still earn brownie car insurance points by accumulating No-Claim Discount (NCD).
| See also: Is an NCD protector worth the money? |
If you're young, but continue to drive safely and maintain a clean driving record, you can expect your premiums to drop significantly. Your NCD bonus increases by 10% every year (up to a maximum of 50% over five years) if you do not claim from your insurer.
Until you attain the maximum NCD, you will just have to find a plan that offers you the type of coverage you need at a price that works for your budget.
Find the best car insurance plan for your needs at GoBear's car insurance portal, or get more informed with our Guide to Car Insurance.
The information in this article is accurate as of 20 Nov 2020 unless otherwise stated. Whilst we endeavour to keep the information accurate and updated, GoBear makes no representation or warranties for the accuracy of the information in this article or content of any websites which may be linked.
This article is for informational and promotional purposes only; it does not constitute advice or recommendation and does not take into account your own individual circumstances. The information in this article may not be updated and you should always refer to the relevant Policy Wording and insurer for the full terms and conditions. In the event of any inconsistency, the Policy Wording and/or information from the insurer shall prevail.